BUMPER: Understanding Culture and Trust
In the absence of trust, people are unwilling to engage in transactions, especially in financial transactions. But where is trust coming from, and how is it spread across countries?
We know there are remarkable differences across countries, with northern European countries being very high on the trust scale and some Latin American countries being at the bottom of the distribution.
In fact, what we know, and it’s very interesting, is that immigrants from countries with high trust, when they move to countries with lower trust, they tend to hold onto their original trust level. And this suggests that our upbringing has something to do with how much we trust.
So, if I think about banks, insurance companies, trust is a fundamental ingredient to convince customers to depart themselves with their money and indeed trust the financial institution that they would do the right thing.
BUMPER: Winning Customer Trust: Dealing with Culture and Bias
It’s also important to understand that when dealing with different ethnic groups, different social background, where is the level of trust or mistrust coming from and indeed understand how this could be ameliorated at some level.
For example, we have evidence that shows that people tend to trust more people that look much more like them. So, diversity in facing customers could be an important mechanism to generate trust.
If we have that financial institutions are too homogeneous and they don’t reflect the demographic of their potential customers, it’s hard somehow to have customers relate to the specific experience.
But generally speaking, evidence shows that lack of trust indeed makes it really, really hard for some customers to walk into financial institutions.
And so, dealing with this reality and understanding the different reasons why people may or may not trust is a very important aspect of every customer interaction in the financial service.
We need to make sure that we unbias our customer force to make sure that they don’t bias themselves to favor some specific people.
But we also know that our customers, they have biases, and they tend to trust less people that look very different.
For example, a big debate among executives nowadays has been to the extent to which, given the fact that women are one of the largest buyers in the US nowadays of insurance products, why our customer force doesn’t mimic that, given the fact that they’re going to be the recipient of effort to convince them to buy some of this product.
Given the fact that women are among majority buyers of insurance, the question is whether a customer force that is more balanced and reflects this demographic should really be a conscious decision on the side of executives.
Similarly, think about the ethnic changing demographic of the customer base—to what extent corporate America should reflect that in order to, A, be able to understand better the needs of this group, and B, in order to really inspire a level of trust and confidence in the financial institution that we know is fundamental for a good relationship to start.